Recovery for Exposure to Hazardous Substances: The Superfund § 301(e) Study and Beyond

Presentations delivered at the Twelfth Annual ABA Standing Committee on Environmental Law Conference on the Environment, May 6-7, 1983

[14 ELR 10098]

The age of toxic torts appears to be upon us. According to Richard K. Willard, Chief of the Justice Department's Civil Division, toxic tort claims against the federal government alone over the next 10 years excluding asbestos claims will top $200 billion — larger than the current federal budget deficit! (See Legal Times, Feb. 27, 1984, at 2, col. 1.) Even if Mr. Willard was generous in his estimates, it is clear that private industry and the government will soon have to defend more and larger claims for compensation for injuries from toxic substances. Pending claims for exposure to toxic substances in the workplace, for example, to asbestos, and for exposure to toxic consumer products, for example, to the drug diethystilbestrol (DES), involve thousands of plaintiffs and billions of dollars in alleged damages. Toxic tort suits based on environmental exposure have been less prominent, perhaps in part because it is more difficult to document long-term exposure to chemicals in the environment than it is in the workplace, where they are handled daily, or in drugs, which are ingested regularly. Nonetheless, toxic tort suits alleging environmental exposure are in progress (see, e.g., Anderson v. Cryovac, Inc., ELR PEND. LIT. 65758 (Mass. Super. Ct. amended complaint filed May 11, 1982)).

To some the word "toxic torts" conjure up an image of thousands of wrongful injuries without a remedy at law (see infra, Hall, Health Risks from Exposure to Hazardous Wastes, 14 ELR 10118). To others, "toxic torts" connote arbitrary schemes eliminating normal legal safeguards in order to make the chemical and related industries pay billions for poorly defined injuries of uncertain scope and origin (see Garrett, Compensating Victims of Toxic Substances: Issues Concerning Proposed Federal Legislation, 13 ELR 10169 (1983)).

The Issues

No one questions that the debate is intense and the stakes enormous. The current issue is whether the underlying problem is sufficiently serious nationally and sufficiently resistant to solution through state common law and statutes to warrant a federal compensation scheme using either shortcuts to tort liability, direct federal compensation, or both.

Concern over toxic torts is a product of two sets of scientific advances in the last 40 years. The post-World War II industrialization of modern chemistry has raised our standard of living, but also has brought some quietly deadly chemicals into our lives: in the workplace, in our homes, and in the environment. During the same period, medicine and public health science have begun to be able to draw causal relationships between long-term exposure to certain substances and previously mysterious diseases, particularly cancer. Science has amassed substantial evidence that some of the products and byproducts of modern industrial chemistry are carcinogenic or otherwise gravely dangerous to human health. Much of the evidence is highly inferential, based on studies on laboratory animals or statistical connections between high incidences of certain diseases and exposure to certain toxic substances. With the realization that there are many toxic substances in our factories, homes, and environment, has come the realization that it is difficult, if not impossible, for most victims to recover for their injuries under existing common law tort and related doctrines. One response has been protective legislation. For example, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) mandated the cleanup of hazardous waste releases and began to address the problem of compensation for damages from releases into the environment, but limited the damages covered to those to natural resources. Highly controversial provisions requiring compensation for human health injuries were replaced prior to passage of the Act with § 301(e), which mandates a study of the victim compensation issue. The study recommended amending CERCLA to provide compensation for injuries caused by hazardous substances (see infra Grad, Remedies for Injuries Caused by Hazardous Wastes: The Report and Recommendations of the Superfund 301(e) Study Group, 14 ELR 10105).

[14 ELR 10099]

The CERCLA § 301(e) study chronicles the limitations of old common law remedies when applied to the new problem of toxic substance injuries. Many health effects from toxic substances have long latency periods, emerging only after years or even decades of low-level exposure. The statutes of limitations in some states bar recovery in these circumstances. Often it is difficult to isolate one substance as a cause, particularly where other potential causes, for example, cigarette smoking, are present. It may be impossible to prove that the toxic substance caused the health injury to the degree of certainty required in the common law given such scientific uncertainty. Even where the cause-and-effect relationship between the substance and the injury can be established to a preponderance of the evidence, it may be difficult to identify a person responsible for putting the injured party into contact with the harmful substance. If a young woman develops cancer traceable to her mother having used DES during pregnancy, who is liable if the victim cannot identify which of many manufacturers of the drug was the source of her mother's pills? If someone living near an abandoned chemical waste dump develops cancer traceable to years of drinking from a well that taps into an aquifer contaminated with several carcinogenic chemicals, which of dozens of companies that deposited chemicals at the site is liable if there are no records of exactly what each sent there? How can the victim recover in tort if the waste generator selected the disposal site with reasonable care?

Common law is not static. It adapts to changes in the world in which we live and can adapt to the problem of toxic torts. However, to do so, courts may have to strain notions of causation and responsibility to the point of creating something akin to an insurance scheme. If this is to be the answer, should the various state courts be given the job of providing it — slowly and piecemeal in the incremental process by which the common law evolves — or should Congress be given the job of creating a uniform national remedy? Many, including a number of influential members of Congress, believe that the latter approach is the only one that makes sense and are working to push a victim compensation bill though Congress (see infra, Cummings, A Review of Legislative Proposals in the U.S. Senate, 14 ELR 10131; and Harris, A Review of Legislative Proposals in the U.S. House of Representatives, 14 ELR 10132).

The Conference

The American Bar Association's Standing Committee on Environmental Law devoted its 1983 conference to the subject of federal legislation to provide compensation to victims of toxic torts. The conference featured a diverse group of experts from state legislatures and Congress, the private bar, academia, environmental groups, and corporations. The speakers outlined alternative statutory victim compensation programs, including a model state statute developed by the Environmental Law Institute (see infra, Futrell, The Environmental Law Institute Study: Statutory Reform of "Toxic Torts," 14 ELR 10108); a California statute (see infra, Strohbehn, Policy Choices Involved in Designing a Victim Compensation Fund: A Comparison of California's Fund and the Section 301(e) Report, 14 ELR 10110); the § 301(e) Study recommendations (see infra, Grad); and several legislative proposals (see infra, Cummings and Harris). They evaluated the effects on victims (see infra, Hall); industry and government finance (see infra, Tozzi, The Office of Management and Budget Study, 14 ELR 10115); and insurance companies (see infra, Cheek, Why Current Victim Compensation Proposals are Unfair and Ineffective, 14 ELR 10124). They analyzed related developments concerning asbestos (see infra, Nathan and Weiner, Superfund for Asbestos Liabilities: A Sensible Solution to a National Tragedy, 14 ELR 10127) and radiation (see infra, Voigt, Actual and Punitive Damages for Asbestos Liabilities Within Regulatory Limits: The Karen Silkwood Case, 14 ELR 10125) damages to human health. While the conference did not produce answers to all the questions, it thoroughly analyzed the central issues concerning legislative solutions to toxic victim compensation. Most of the analysis remains valid today, though nine months have elapsed since the conference.

Recent Developments

The last nine months have seen great attention paid to toxic torts, but not much action. State and federal courts have issued several important rulings, some of which ease the way for plaintiffs, while others bar the courtroom door. On the administrative front, California has begun to implement its victim compensation provision and federal agencies have entered the public debate. Congressional committees have held hearings and stated interest in reporting out bills on the subject, but though a comprehensive new provision has been introduced, quick action is unlikely.

A sampling of recent decisions indicates that the courts are wrestling with a number of major issues in toxic tort cases. Some cases, such as two class actions concerning DES and the herbicide Agenct Orange, are product liability cases. On January 9, 1984 the Second Circuit upheld certification of two classes in an Agent Orange suit, departing from the action in a DES case on behalf of 3,800 women in which conditional class certification was withdrawn. The Agent Orange decision has been appealed to the Supreme Court as Diamond Shamrock Chemicals Co. v. Ryan, 14 ELR 10143. DES plaintiffs in two state suits fared better. The Michigan Supreme Court accepted a modified alternative liability theory to allow plaintiffs to proceed even though they could not identify the specific manufacturer of the DES their mothers took. The February 6 ruling in Abel v.Eli Lilly & Co., No. 64712, gave the DES manufacturers the burden of proving that their products were not the culprits (see Nat'l L.J., Feb. 20, 1984, at 5). On January 6, 1984 the Wisconsin Supreme Court blazed a similar path around the same roadblock in Collins v. Eli Lilly & Co., No. 82-1844, another DES case. The court rejected plaintiffs' request for use of the "market share" theory developed by the California Supreme Court in Sindell v. Abbott Laboratories, 26 Cal. 3d 588, 607 P.2d 924, but ruled that defendants had the burden of proving that their product was not implicated in the injuies and that plaintiffs could recover in full from any one defendant (see Nat'l L.J., Feb. 6, 1984, at 31). However, in late 1983 the Fifth Circuit ruled in Thompson [14 ELR 10100] v. Johns-Manville Sales Corp., 714 F.2d 581, in an asbestos case, that Louisiana law does not provide an avenue for circumventing problems in identifying the manufacturer of the speciic product causing harm. That decision has been appealed to the Supreme Court, 14 ELR 10143.

Not all courts were as hospitable to toxic tort plaintiffs. In Braswell v. Flintkote Mines, Ltd., No. 79 G 996, an asbestos case, the Seventh Circuit rejected a constitutional challenge to the Indiana product liability statute of limitations, which requires that the claim be filed within two years of the time when the plaintiff knew or should have known of the injury. On February 21, 1984 the Supreme Court declined to review two court of appeals decisions that held that Federal Tort Claims Act actions for radiation damages suffered by servicemen were barred by the Feres doctrine, 14 ELR 10143.

Toxic tort plaintiffs took solace in a jury award in federal court in Kansas of $3.15 million in damages to the wife and children of a man who died of leukemia caused by working with benzene. The defendant, Texaco, had failed to label the benzene containers indicating the potential health hazards of the substance (see HAZARDOUS MATERIALS INTELLIGENCE REP., Jan. 27, 1984, at 4). These cases, while by no means a complete survey of recent developments in the law illustrate the problems in litigating toxic tort claims, and the ability of courts to reduce those problems in some instances.

Administrative agencies have begun paying more attention to toxic tort issues, although the only action has been at the state level. In his discussion of the California statute (infra), Mr. Strohbehn indicated that no claims had been filed. At least one claimant has since come forward and that state's administrative victim compensation wheels are beginning to turn. (Telephone conversation with Stan Phillippe, Assistant State Superfund Chief, California Department of Health Services, Nov. 1983.) On the federal scene, several agencies have recently taken an active interest in victim compensation. There is now an Interagency Task Force on Toxic Torts Compensation, chaired by J. Paul McGrath, Assistant Attorney General in the Civil Division of the Department of Justice. And last summer, the Office of Management and Budget issued a report opposing proposals for a federal victim compensation program as "an open-ended fiscal threat." (INSIDE E.P.A., June 17, 1983, at 7.) Shortly thereafter, EPA announced that it was going to treat toxic torts as a serious problem worthy of attention. (INSIDE E.P.A., July 8, 1983, at 4.) But the federal administrative action really takes a back seat to congressional interest at this point.

Congress has continued to show serious interest in victim compensation legislation, but not enough agreement to make progress on legislation. Several House committees held hearings in late 1983 and the Senate Environment and Public Works Committee leadership expressed its intent to report out a bill this spring (see Cummings, Legislative Outlook in the Senate: Finishing Unfinished Business, 14 ELR 10002 (Jan. 1984)). Much of the debate continued to focus on the bills discussed at the Standing Committee conference (see infra, Cummings and Harris), but Congressman Florio also has introduced a major new piece of legislation. H.R. 4813 would amend not CERCLA, but the Solid Waste Disposal Act, to provide, among other things, for recovery of medical and relocation expenses by toxic pollution victims. While key leaders in the Senate and House like Senator Stafford and Congressman Florio remain committed to action on victim compensation legislation, many outside observers believe that they will be unable to find the compromises necessary to cut through the controversy this session (see Ward, Legislative Outlook in the House: Only RCRA Amendments Likely, 14 ELR 10003 (Jan. 1984)). The debate, as framed by the Standing Committee conference, will continue.

The Editors